Week 34 - Aug 19 Investment Move
- Current Market condition as of 10:15 am EST
- Today's Option trades (as of 10:00 am) EST
- This week's dividend - week 34
- High Yield - Continue from the Aug 15 post.
- Can options investment be better than a dividend stock?
Current Market condition as of 10:15 am EST
As of 10:15 am EST, the US markets are split.
Today's Option trades (as of 10:00 am) EST
Here are my options trades on Aug 19 @ 10:00 am (EST).
Summary of my trades:
- Rolled up the PUT legs of the SPY iron condor for $2 premium each.
- Rolled Put credit spread out 2 weeks and lower strike price for $6 each.
- Rolled Put credit spread up in strike price for $16 each.
This week's dividend - week 34
My passive income for this week is about $90. I will sell about $200 of a dividend stock and use that money to purchase 1 share of QQQM (as part of my portfolio rebalancing).
Here is my purchase of 1 QQQM today at market price. I will continue to do this for the next 2 or 3 year.
High Yield - Continue from the Aug 15 post.
Last week, I revisited the high-yield piece of my portfolio. I have been testing JEPI since Jan 2023. In 2024, I trimmed my DIVIDEND holding because I wanted more exposure to QQQ and other holdings. So why would I look into High-Yield Investment since I do not need the INCOME at this moment.
Watch Hamilton Reiner Interview
Can options investment be better than a dividend stock?
Many of these options investment offer a monthly distribution vs a quarterly dividend from a dividend stock.
There are a few companies that offer a monthly dividend:
- EPR Properties (NYSE:EPR)
- Agree Realty (NYSE:ADC)
- Gladstone Commercial Corporation (NASDAQ:GOOD)
- LTC Properties (NYSE:LTC)
- Realty Income (NYSE:O)
- SL Green (NYSE:SLG)
- STAG Industrial (NYSE:STAG)
To make money in stock, you generally need to be a long on the position. In options trading, you can do this in many ways. You can use covered calls (which is similar to going long). So what advantage does a covered call options strategy have? If the markets are slow-moving (less than the expected move), the covered call will pay you the premium upfront. When the stock stays within the trading range (under the strike price of the covered call), you can reap the upside of the underlying while keeping that income premium from the covered call. If the markets are dropping, the covered call method should do better than just going 100% long on a stock.
If we use a 10% return for the stock market, then the question is can options investment like JEPI, JEPQ, JEPY, or QQQY do better than 10%? This is where having experience as an options trader helps explain this. I do over 1000 option trades a year and I can make between 1%-3% on some of my trades. There are other options trades where I lose money. I need to look at my long-term average return. Let's assume I can make 15% a year on average in options trading, which means I only need to average 0.30% a week in total returns from my option trading.
Is this why professional traders that run JEPI/JEPQ or JEPY/QQQY can produce a higher return than other investments?
Have a profitable day!
Solving Chaos